Factors-Sales and income in the fiscal year that ended in March 2017 were lower y/y due to an decrease of revenue and profits by production transfer from Japan to overseas.-Business results were higher in Asia, while they were lower in Japan, North America and Europe by impact of foreign exchange rate.

1) Sales

-Since sales of fuel pump module,canister and injector were decreased, overall sales for the year were decreased by 5.4%.

Take advantage of the expanding market of diverse new models achieving better fuel efficiency and products that meet customer needs.

Exhaust systems: throttle bodies

Expand product range and at least maintain or increase top global market share.

Expand production facilities that make use of current production lines.

Exhaust systems: core electronic parts

Develop and manufacture core electronic parts in-house.

Standardize more parts for throttle bodies and EGR valves as soon as possible.

Fuel systems: fuel pumps and modules

Work to save electric power by abandoning pumping, in order to save fuel.

Innovating product creationAdvance technology on facilities and equipmentMake optimum use existing facilitiesMake structural changes to products and processes through new production methods

Product developmentEvaporation emission control: canisters

Develop more compact products and systems that comply with global regulations based on those of the USA and China.

Intake & exhaust systems: Sub-systems

Work on developing mainly EGR values that have higher response and sealing performance

Develop technology that maintains discharge rate that can respond to supercharging

Develop insulation technology

Fuels (LPG, CNG, FCV)

Expand scope of FCV products

Expand to other than hydrogen supply systems

Strengthening R&D capabilities: Establish Hirose Technical Center

Strengthen fundamental development skills, consolidate facilities for evaluating fuel-system durability; and unify and enhance efficiency by locating the Center nearby production plants.

Strengthening R&D capabilities: expand system conformity business

Improve environmental features and fuel efficiency, working as a partner developing new vehicle models with OEMs.

Further develop system conformity and timely respond to growing needs.

Regional growth strategyAmericas

Strengthen profitability in the USA

Expand and ensure stability of Mexico

China/Korea

Increase sales of canisters

ASEAN/India

Increase sales of fuel injection products for two-wheelers

Outlook for FY ending Mar. 31, 2018

(in millions of JPY)

FY ended Mar. 31, 2018(Forecast)

FY ended Mar. 31, 2017(Actual Results)

Rate ofChange (%)

Overall

Sales

205,000

203,769

0.6

Operating income

8,800

8,159

7.8

Ordinary income

8,800

7,407

18.8

Net income

5,600

4,505

24.3

Factors-Prediction of lower sales and income based on an exchange rate of USD 1=JPY 105.

Medium-term Management Plan

Management goal index-Group consolidated net sales and operating profit of each 250 billion JPN and 15 billion JPN arelisted as medium-term management goal with the target of over 10% ROE.

Business strategy-By assessing market trend and technology trend accurately, attempt to accurately business expansion in growth area and fields by working on development of new business fields by utilizing core technologies.

Strengthening competitiveness of products development・manufacturing -With further refining of core products and technologies of valves, pumps, motors and sensors which have been developed over many years, promote development of the next generation/ future products and the products for electrification of the automobile with the efforts of strengthening costs competitiveness aiming a half of the costs.

R&D Expenditure

R&D Activities

-Strengthen development of products that lower fuel consumption and exhaust gas emissions, as well as further improve performance, safety, and comfort.

Lower fuel consumption and exhaust gas emission: -launched production of DC motor EGR valves corresponding to all flow rate, response and sealability at high dimension required to EGR valves for flow control of EGR system.-Lower exhaust gas emissions: launched production of canister that complies with Euro 6 emission regulation in Europe addition to the North American LEV III regulations, andcomply with stricter Chinese regulations in the future.

Strengthening development of the products meeting performance improvement, safety and comfortability.

Capital Expenditure

(in millions of JPY)

FY ended Mar. 31, 2017

FY ended Mar. 31, 2016

FY ended Mar. 31, 2015

Overall

12,738

15,884

13,280

-Investment of JPY 6,519 million in Japan, and JPY 6,219 million outside Japan. -In Japan, investment of JPY 1,079 million to strengthen capabilities for developing systems and future products for next-generation vehicle models, including JPY 563 million in the Hirose Technical Center building.